IDAHO MAN SENTENCED TO 37 MONTHS FOR SCHEMING TO DEFRAUD INVESTMENT COMPANY OF $3.1 MILLION
BOSTON, Mass...An Idaho man was sentenced today in federal court for one count of wire fraud in connection with a scheme to defraud an investment company of $3.1 million in order to buy and sell stock using the company’s money rather than his own.
TIMOTHY PATRICK FLAHERTY, 30, was sentenced by U.S. District Judge Nancy Gertner to 37 months of imprisonment, to be followed by 3 years of supervised release and restitution of over $547,000. FLAHERTY had pleaded guilty on December 19, 2009.
At the earlier plea hearing, the prosecutor told the Court that had the case proceeded to trial the Government’s evidence would have proved that in September 2008, FLAHERTY had been in debt due to failed investments. To obtain more money for investing, FLAHERTY initiated 31 separate electronic funds transfers (EFTs) of $100,000 apiece to transfer a total of $3.1 million from his checking account at a bank into his brokerage account at a separate investment company, even though the checking account had less than $1,300 when the fraud began. FLAHERTY knew that he did not have $3.1 million, that it would take the investment company one or two days to learn that he lacked the money, and that the investment company would advance him the funds in the meantime. When FLAHERTY received the advanced funds, he used them to buy and sell over $2 million in stock before the EFTs were rejected. At that point, the investment company liquidated FLAHERTY's stock purchases and lost over $547,000. FLAHERTY then promised the investment company to repay it. But he never made a payment, and eventually left his home without giving his relatives an address or telephone number at which to contact him.
United States Attorney Carmen M. Ortiz and Richard DesLauriers, Special Agent in Charge of the Federal Bureau of Investigation - Boston Field Division made the announcement today. The case was prosecuted by Assistant U.S. Attorney Scott L. Garland of Ortiz’s Cybercrimes Unit.